If you have a friend or family member who is renting an apartment in an expensive city or from a landlord with strict monthly income rules, you may be called upon to be a guarantor at some point. This is often the case for parents of children who are renting an apartment in a new city before finding adequate employment, for example. But what is a guarantor, and what are your obligations if you decide to sign on as one?
What Is a Guarantor?
A guarantor is someone who signs the lease with a tenant and takes on their financial obligations under the lease. If a tenant doesn't pay their rent on time, a landlord can come after the guarantor for the money. Often, a renter's parent acts as a guarantor, assuming the parent is in a sound financial situation and want their children to live in an apartment that might be a bit out of their reach otherwise. Relatives and friends are the next best bet if a parent is unable to be a guarantor.
If you are deciding whether to be a guarantor, it is important that you trust the person you are signing for and his or her ability to pay. It's also important that you can handle the commitment financially, as it is within the realm of possibility that you would need to pay up. If you are in your own lease, you can still be a guarantor for a friend or loved one as long as you can show a landlord that you're financially qualified.
Your Obligations as a Guarantor
Once a tenant signs their lease, they're on the hook for rent for the remainder of the lease term. In similar fashion, someone who signs as guarantor becomes committed to fulfilling that duty for the same period. So, if you sign the lease of a relative or friend as a guarantor, you must agree to stay the guarantor for a year.
If your financial situation or your relationship with the person you signed for changes and you no longer wants to be a guarantor, you must normally wait until the lease term runs out. Once this happens and the lease expires, your role as guarantor ends. (For it to continue, you would need to sign a lease renewal as guarantor for a new lease term.)
Because a guarantor's duties only come into play in the event a tenant misses a rent payment, it's quite possible that you won't ever have to pay a penny as guarantor. However, if you insist on getting out of your lease obligations, the tenant can try to convince their landlord to modify the lease to remove you. The landlord might agree to this if the tenant can prove their financial picture has greatly improved, or if they are able to supply a substitute guarantor who passes muster.